10 things insurers can do to help their brokers

10 things insurers can do to help their brokers

10 things insurers can do to help their brokers

Respecting broker autonomy
Respect the business autonomy of brokerages. Thomas disparages the “nearly universal” practice of insurers to “annually send their marketing representatives in to see agency principals asking for a production goal for the upcoming year.” He said the practice originates in the home and branch offices of carriers, where marketing personnel set internal goals for each of their agencies.  

Do your due diligence on broker partners
Insurers need to do their due diligence before pursuing contracts with prospective brokerages. “In the past 24 months, our agency has either pursued or has been pursued by prospective carriers on 11 occasions,” Thomas wrote. “In those instances where we were pursued (six times), the carriers’ marketing representatives never satisfactorily explained why entering into a contractual relationship with our agency was a mutually beneficial union for both parties.”

Don’t hang your hat on “ease of doing business”
Technology has improved doing business with insurance companies generally, and so “ease of doing business” should not be the signature benefit that insurers promote to consumers, according to Thomas. “From time to time, I pass a motel advertising air-conditioned rooms or colored TVs or both,” he added. “Offering ‘amenities’ that the buying public expects or demands is a poor way to differentiate one’s business.”

Singing from the same hymn book
Insurers' executives must create internal processes in which managers, marketing representatives, underwriting personnel and their contracted agency personnel all sing from the same hymnal, said Thomas.

Allow your underwriting departments to be creative
Insurers need to allow their underwriting departments to be creative. This requires more precise selection of underwriters, better training regimens and strict auditing of accounts written, Thomas said, although “unwilling to succumb to this burden, the majority of company executives have tied the hands of underwriters. They have institutionalised what can be done, what cannot be done and what discretion, if any, underwriters are permitted to exercise.”

Would these points work in Australia? What would you add to the list? Comment below...


 


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9 Comments
  • Dean McCauley 17/01/2013 12:39:06 PM
    Very sound advice and is very relevant in today’s Australian General Insurance Market. The question is, are insurers listening or even prepared to or are they just going to remain in their ivory towers? I can vouch that Points 1 and 10 are very relevant in respect to our main carrier and Point 2 in respect to our minor carrier. I had a good laugh at Point 8 as well. Does anyone remember those Suncorp adds soon after the Qld floods where they were advertising that their private motor policy covers flood! Well derr, all motor policies cover for flood and have done so for a very long time.
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  • Paul Murphy 17/01/2013 1:01:34 PM
    There are quite a few areas that are common to Australia and the US. Every insurer offers "vanilla" lists of preferred occupations via technology platforms. Surprisingly most favour the same risk appetites. Who'd of thought it?!?! The Australian market is made up of clones who lack imagination, initiative and genuine underwriting skills.( With some notable and honourable exceptions). No wonder so much business goes to Lloyd's both local cover holders and direct into London. At least there you can have a conversation and get intelligent responses and innovative solutions for clients. The rise of technology platforms, the dumbing down of staff who lack genuine skills training and the rise of direct insurers dictating to the their commercial cousins in the same fold, mean things are only likely to get more restrictive. However as ever brokers serving the middle market will find new ways to beat the challenges and outwit "the rise of the machines".
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  • Dean McCauley 17/01/2013 1:45:45 PM
    Well said Paul and I agree. I can only hope that insurers realise that computer systems no matter how good they are can only do so much and nothing will replace the expertise of a traditionally trained and experienced underwriter, of which appear to be a dying breed these days. I remember the days as a former underwriter of not only being able to make sound decisions based on parameters given with reasonable discretion but that it was expected of you. Now if you give them a square peg for a round hole it has to be referred to the State Underwriting Manager or National Product Manager! Serioulsy!! Hopefully, we will see traditional underwriters again before that experience pool has disappeared for ever.
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